Project LOGICAL – transnational logistics' improvement through cloud computing and innovative cooperative business models - Project website about the transnational logistics cloud project LOGICAL

Funding & Background

LOGICAL projekt se izvaja preko CENTRAL EUROPE programa ,
ki ga sofinancira ERDF

 

Given the strategic position of C.E. in between leading industrial regions of Europe and emerging markets, the area’s importance for cargo transport and management steadily increases. The logistics sector therefore represents a considerable asset for economic growth and employment. Given the complexity and high frequency of operations, modern ICT represents a significant competitive advantage. Against this background, it is fitting that six major C.E. logistics hubs muster their powers to transfer cloud computing in logistics as recent result of the “InterLogGrid” research project and jointly further the tool to full operational capacity.

LOGICAL henceforth addresses with regard to these strategies

  1. the promotion of innovation,
  2. the access and usage of modern ICT services,
  3. the enhancement of competitiveness,
  4. stronger co-operation between research and businesses,
  5. enhanced human capacities to apply innovative ICT tools, and
  6. more sustainable freight transport.

(1) The European Commission’s Freight Transport Logistics Action Plan (COM (2007) 607) identified the possible contribution of advanced ICT towards co-modality, cargo management and better connecting businesses, infrastructure providers, and administrations as priority action (#1: e-Freight and Intelligent Transport Systems). The Communication describes a vision of an “Internet for cargo” where information would be made easily accessible on-line in a secure way. The cloud computing concept of LOGICAL brings that vision to practical implementation as a universal ICT device is put into practice at least at six virtually connected logistics hubs in Central Europe. The chosen approach of cloud computing represents an emerging and highly innovative technology as recent discussions at the leading fair for ICT (CeBIT; e.g. Microsoft showcase) have underlined. The introduction of the tool furthermore strengthens capacities of businesses to apply latest research results in their daily routines.

(2) LOGICAL promotes cloud computing as groundbreaking ICT innovation to facilitate interoperability in the logistics sector. The introduction of the new tool at least at six leading logistics hubs of Central Europe is undertaken jointly with business representatives involved as full partners in LOGICAL as well as participatory measures (e.g. workshops and feedback meetings).

(3) The project contributes to an enhancement of competitiveness of multi-modal hubs as locations for business activities in logistics on one hand, and the achievement of competitive gains of enterprises at these hubs. The first is achieved as the cloud computing tool gives affordable access to systems of global players and integrates systems of institutional actors is to be regarded an important location factor. Especially small enterprises at these locations can reduce their costs as high entrance barriers representing bottlenecks for efficient co-operation are overcome.

(4) LOGICAL brings about an improved co-operation between business promoters and researchers. This is already emphasised by the composition of the interdisciplinary partnership. The project methodology foresees a close and interrelating implementation of all activities where both side’s capacities are combined.

(5) To ensure that the development of human skills follows the introduction of the new tool, Transnational Seminars addressed to staff working in logistics are organised and an e-learning platform is set up. The built capacities contribute to a higher productiveness of logistics companies.

(6) The capacity of the “LOGICAL Cloud” to manage freight flows of different transport agents collectively increases the attractiveness of cleaner transport options (train, shipping). LOGICAL henceforth realises positive environmental impacts.

schematic representation of global commodity flows
(reference: PSI Logistics GmbH)

Background information related to the area of intervention

Affordable access to data and management programmes and efficient multi-modal co-operation between actors in logistics are preconditions for economic development and growth in this highly competitive sector. Central European logistics hubs are under considerable pressure to advance their capacities to manage increasing amounts of freight while decreasing their handling time. This requires business operators to take full advantage of modern ICT services, and small companies enhance their capacities of b2b co-operation, including their ability to interact with global players in logistics. In its Communication “Freight Logistics Action Plan” (COM (2007) 607 final), the European Commission identifies e-Freight and Intelligent Transport Systems as top priority to exploit the logistics sector’s maximum contribution to economic growth, employment, and value added. The same line of thought has been integrated in the Operational Programme of the Central Europe Programme.

LOGICAL replies to the AoI 2.2 – Developing Multi-modal Logistics’ Co-operation as it foresees actions to address the problems and issues identified by the partnership. Those include several aspects of data access and management experienced by infrastructure providers and logistics operators. These problems include the challenge that in today’s logistics sector the availability and accessibility of data is a precondition for all business activity. Collecting, hosting and managing the data leads to considerable costs and is usually done by each enterprise individually. That brings about the challenge to create appropriate own capacities to analyse data and to foresee market dynamics. Moreover, each company needs to assess on its own its compliance with data security and confidentiality guidelines. Data and management software access also represent considerable costs. Finally, logistics hubs’ data management expansion capacities often cannot keep up with rising needs.

Moreover, the logistics sector is in need of flexible ICT tools that can easily be adjusted to new market dynamics without requiring the replacement and costly update of existing systems. This concerns even more the management of freight transportation between logistics hubs and the promotion of inter-modal co-operation, hence optimising processes especially in times of economic recovery.

LOGICAL partners are aware of these challenges and constraints and have therefore jointly developed an approach how results of the research project “InterLogGrid” with regard to cloud computing can be transferred to the logistics sector. Cloud computing has the potential to respond to all above described problems and provides a costefficient, universal and easily upgradeable tool: all relevant data of the logistics hubs is centrally stored and hosted by one service provider, leading to considerable economies of scale since expenses for own hardware, software and maintenance personnel can be avoided.

All data of one hub is stored in a cloud that is widely accessible to all participants. Data protection and security concerns can be appropriately addressed and new dynamics are detected early. Expanding on grid computing concepts, cloud computing systems are furthermore easily expandable and new components can quickly be added without the necessity to introduce a completely new system. Moreover, the foreseen pricing structure is a pay-peruse system that is considerably lowering market entrance costs for small enterprises. Through a common cloud architecture and inter-cloud linkage, data clouds of different logistics hubs can be interconnected. Henceforth, the foreseen cloud computing device addresses bottlenecks in b2b co-operation and facilitates widely accessible data management, allowing exploring all potentials of multi-modal co-operation between businesses of different size and cargo turnover at and between major Central European logistics hubs.

History of the project idea

Within the CADSES project CITYREGIO II, the LP initiated a process that in 2008 led to the establishment of an institutionalised structure of the Leipzig region‘s logistics cluster. The network association Leipzig-Halle has more than 100 members representing businesses of different sizes, universities and public authorities. The network members have identified the access to modern IT tools as a key factor to enhance their competitiveness. Especially the high transaction costs that hinder intermodal co-operation between small enterprises and global players with own IT management systems limits the interoperability of logistics businesses. Within the „InterLogGrid“ research project, funded by the German Ministry for Education and Research, a cloud computing concept has been developed to overcome this bottleneck. In a meeting with logistics players from Bologna (CITYREGIO II) and Wroclaw (cooperation in VIA REGIA+) the concept was introduced, leading to the idea to implement it in a transnational project.

The partnership was extended to other important Central European knots to unleash the full potentials of a multicloud concept where a significant number of logistics hubs are connected virtually. The LOGICAL consortium represents freight villages, air hubs, interior and sea harbours, and a major cargo train operator from six countries of the programme area. These share the awareness of the technical possibilities of cloud computing for both the improvement of the interoperability of businesses active at one location and the optimisation of transnational intermodel freight transport. LOGICAL partners understand themselves as a pioneer group that develops and tests an highly innovative IT tool that has the potential to strengthen Central Europe‘s strategic importance for cargo transport between North and South, old and new EU members and evolving East European markets. Hitherto, the tool‘s transfer to other locations is a priority.